More Down And Out Down Under

With Australian banks such as ANZ and Bankwest relocating their back offices to New Zealand and India, and miners like
BHP Billiton
and Rio Tinto closing down some of their operations, Australia's unemployment rate rose more than expected to a five-year high in March.

The Australian Bureau of Statistics said Thursday that unemployment rose to 5.7% from 5.2% in February, the highest level since October 2003. The consensus expectation was for unemployment to edge up to 5.4%.

Thanks to the continuing fallout from the global economic crisis, Australia's total workforce dropped by 34,700 to 10.8 million in March. Full-time employment decreased by 38,900, while 4,200 more people were in part-time employment.

"These figures are sobering news," Deputy Prime Minister Julia Gillard told reporters in Canberra. "This global financial crisis and global recession has hit jobs around the world and, of course, is having a significant impact on jobs in this country."

Indeed, the government expects worse to come: In February, it forecast the jobless rate will reach 7.0% by mid-2010.

"There was never any doubt that employment would weaken, though we had thought the decline would continue to be more gradual," said John Edwards, HSBC's chief economist for Australia and New Zealand. "We expect the unemployment rate to increase towards at least 7.5% in the first quarter of next year."

The Reserve Bank of Australia on Tuesday cut interest rates to a 49-year low of 3%, striving to help Australian households and companies to get through the economic downturn. (See "Aussie Banks Wary Of Rate Cut") Companies are also trimming costs to survive the global financial turmoil.

In late March, ANZ Bank said it would shift 100 call center jobs to New Zealand, and confirmed an additional 500 back office jobs would be moved offshore to its facility in Bangalore, India, by the end of the year.

Last month,
BHP Billiton
axed 400 mining jobs in Queensland, in response to weakened global demand for metallurgical coal this year. The country's No. 2 miner,
Rio Tinto
, said earlier this week it would chop 100 permanent jobs at its Weipa bauxite mine and lay off 570 contractors at its stalled Gladstone alumina refinery expansion.